North East Somerset

2015 Result:
Conservative: 25439 (49.8%)
Labour: 12690 (24.8%)
Lib Dem: 4029 (7.9%)
Green: 2802 (5.5%)
UKIP: 6150 (12%)
MAJORITY: 12749 (24.9%)

Category: Safe Conservative seat

Geography: South West, Avon. Part of the Bath and North East Somerset council area.

Main population centres: Keynsham, Radstock, Midsomer Norton.

Profile: An unusually shaped seat that takes in all the western part of the Bath and North East Somerset council area, and the rural outskirts of Bath (known as Bathavon) in the east, meaning the Bath constituency is entirely surrounded by a thin belt of North East Somerset. The seat contains some contrasting areas. The northern parts of the seat, especially the town of Keynsham, are very much affluent commuter areas for Bath and Bristol. To the east the seat is more rural, covering the patchwork of farmland and rural villages that make up the Chew Valley. The southern part around Midsomer Norton and Radstock is part of the old Somerset coalfield. The last of the coal mines closed in the 1960s, to be replaced by light industry, but the close knit industrial heritage of the area remains.

Politics: Called Wansdyke (after the old local authority) until 2010, this was a Conservative seat through the 80s, fell to Labour in the 1997 landslide and was regained by the Tories in 2010. As might be expected, the rural and suburban parts of the seat tend to the Conservatives, with Labour`s support strongest in the former mining areas and parts of southern Keynsham.


Current MP
JACOB REES-MOGG (Conservative) Born 1969, Somerset, son of Times editor Lord Rees-Mogg. Educated at Eton and Oxford University. Former fund manager. Contested Central Fife 1997, The Wrekin 2001. First elected as MP for North East Somerset in 2010. Jacob Rees-Mogg cuts an other-worldly and young-fogeyish figure, often revelling in speeches litt ered withhistorical and classical references. In his first Parliamentary contest in 1997 he famously went canvassing accompanied by his former nanny.
Past Results
2010
Con: 21130 (41%)
Lab: 16216 (32%)
LDem: 11433 (22%)
UKIP: 1754 (3%)
Oth: 670 (1%)
MAJ: 4914 (10%)
2005*
Con: 18847 (37%)
Lab: 20686 (41%)
LDem: 10050 (20%)
UKIP: 1129 (2%)
Oth: 221 (0%)
MAJ: 1839 (4%)
2001
Con: 17593 (36%)
Lab: 22706 (46%)
LDem: 7135 (15%)
GRN: 958 (2%)
Oth: 655 (1%)
MAJ: 5113 (10%)
1997
Con: 19318 (35%)
Lab: 24117 (44%)
LDem: 9205 (17%)
Oth: 755 (1%)
MAJ: 4799 (9%)

*There were boundary changes after 2005, name changed from Wansdyke

Demographics
2015 Candidates
JACOB REES-MOGG (Conservative) See above.
TODD FOREMAN (Labour) Born Kansas. Educated at Grinnell College. Solicitor. Kensington and Chelsea councillor since 2010. Contested West Central 2012 London Assembly elections.
WERA HOBHOUSE (Liberal Democrat) Born Germany. Rochdale councillor 2004-2014, originally elected as a Conservative.. Contested Heywood and Middleton 2010. Defected to the Liberal Democrats in 2005.
ERNIE BLABER (UKIP) Former manager and royal marine.
KATY BOYCE (Green)
Links
Comments - 531 Responses on “Somerset North East”
  1. Its been a long while building up to this:

    1998 – the last single month of trade surplus
    2000 – industrial output peak
    2002 – government debt as a % of GDP starts to increase
    2003 – levels of home ownership starts to fall
    2006 – productivity starts to stagnate
    2008 – real earnings starts to stagnate

    Even the FTSE100 was lower on Referendum day than it was at the start of the millennium.

  2. “We have lost a huge amount of industrial capacity and the vast majority is never realistically going to come back”

    Are the coal mines, steel mills and shipyards coming back? No. Are the car makers going to expand sufficiently to make up for it? Probably not. However assuming therefore that we are never going to attain a decent manufacturing base ever again betrays a massive lack of forward thinking.

    Those industries are old hat, the growth industries of the future will be based on emerging technologies such as robotics, AI, bioengineering, nanofabrication, advanced systems physics, green technology and space exploration.

    Thanks to our internationally respected universities we are still world leaders in all these fields. our problem is we are uniquely crap at transferring this research into commercial enterprises. The reasons for this are partially explained in the article I posted earlier on this thread but suffice to say its still very much possible to turn things around with a proper strategy.

  3. The biggest concern for me is that the lack of manufacturing has given way to flexible working in the service sector. Will the mines or coal come back? No. But that doesnt mean we cant offer secure working

  4. Rivers- I for one hope you stay in the UK. This country needs more young people like you and rather fewer chavs, yobs and slags.

  5. Really, Tristan? Couldn’t you have finished that sentence after the word “you”, and left out the middle-class snobbery?

    Matt – I take a more pessimistic line. IMO government decisions are a relatively minor factor in the reduced job security of modern British workers. Much more significant is the accelerating rate of change in the developed world more generally. It’s often said that most children in school today will grow up to have jobs that do not yet exist. Casualisation of the work force doesn’t help matters but even if you reversed that, even if the temporary job became a thing of the past, there would be the unavoidable truth that your chosen profession might not be long for this world.

  6. Polltroll- nope. Stand by by every word.

  7. This is a fair point. They reckon countries like Australia are having to consider a basic income to address future long term unemployment amongst a majority of its workforce in thr mect decade

  8. ‘ Those industries are old hat, the growth industries of the future will be based on emerging technologies such as robotics, AI, bioengineering, nanofabrication, advanced systems physics, green technology and space exploration. ‘

    One thing where Britain has been going wrong is to assume that enough wealth can be created by highly skilled sectors whether in manufacturing or services.

    Aside from the fact that that has failed it also makes Britain too dependent upon a narrow range of industries and leaves large numbers of people detached from the wealth creating process.

    We need to ensure that wealth creation in Britain takes place throughout the value chain.

  9. Above speaks someone who obviously has a lot of experience working in manufacturing. Rivers’ views are I’m afraid very naive indeed. And strangely prejudiced in their assumption that western nations can still have much if any natural edge in those areas he lists. Unfortunately the Chinese lead the world in most of the areas he lists at least in terms of producing the products if not all the innovation. That will only intensify in the coming decades. “Green technology” is an industry I do a lot of work in, especially solar, and the Chinese have literally taken almost the entire market. Even German solar cell manufacturers have virtually disappeared.

    Niche and high end manufacturing are never going to be the answer to the problem. You will never employ more than a handful of people making Jensens no matter how much market share you get. There is no alternative to being cost competitive in baseline commodity products if you want to have a decent manufacturing sector.

  10. Although large manufacturing remains in the UK, and more so in Germany.
    so it’s not impossible.
    Clearly the real difficulty is it’s very hard to create new companies like that once fallen behind or out altogether.

  11. I’m always disappointed at how the establishment view wealth creating jobs at or below average wages with such disdain and their willingness for Britain to lose them.

    While at the same time being happy to have ever increasing numbers of wealth consuming jobs at or below average wages. All ultimately subsidised by borrowed money.

  12. What constitutes a “wealth creating” and a “wealth consuming” job? Does every job fall into one category or the other?

  13. That depends if you’re talking about an individual or a national basis.

    On a national basis wealth creating jobs bring extra wealth into the country or whose output would otherwise be met from abroad.

    So jobs in agriculture, raw material extraction, manufacturing and various service jobs including those in tourism and some financial and educational services.

    Wealth flows abroad when it is used to consume goods and services of foreign origin.

    Now pretty much everyone consumes some goods and services of foreign origin but only a minority of people are actually creating wealth for the country. Those that aren’t include those not working (half the country including the young and the old) and millions of people in service industries.

    Now that is not to say those service industries are not useful. For example NHS employees provide a useful service and in return they are paid a share of the wealth that Britain creates. But the fact remains that they consume wealth but do not create it.

    Likewise there are other, less useful, workers who also consume wealth but do not create it for Britain. Large amounts of the retail / bar / restaurant / entertainment industries for example – unless they are part of the tourism sector.

  14. That’s a curiously zero-sum view, Richard. Are you saying that we can, as a country, only enrich ourselves by depriving other countries?

  15. International trade is zero sum – one country’s imports is another country’s exports.

    What has happened over the last twenty years is that Britain’s wealth consumption has increased at a faster rate than Britain’s wealth creation. These extra goods and services which have been consumed have come from abroad:

    https://www.ons.gov.uk/economy/nationalaccounts/balanceofpayments/timeseries/hbop/pnbp

    Now Britain can certainly enrich itself by creating more wealth but that is rarely the focus of economic debate. Rather people are more focussed on wealth consumption and as only a minority of people are engaged in wealth creation while everyone consumes wealth politicians encourage wealth consumption.

    So we have had the situation where over the last decade the government has borrowed a trillion pounds and that money has been flowing out of Britain at a rate of £100bn per year in recent years.

    As an example triple lock pensions have allowed my parents to spend more on holidays. But that extra spending has been abroad – the government has in effect subsidised with borrowed money wealth consumption and low paid employment abroad.

    But if instead the government had not given pensioners the extra money but used it to cut VAT on the UK tourism industry then that would have reduced the amount of money spent abroad, increased the amount of foreign money spent in Britain and subsidised wealth creation and low paid employment in Britain.

  16. Richard, you write a lot of sense about economics, but as I suspected your distinction between “wealth creators” and “wealth consumers” is a nonsense.

    You mention NHS workers, and graciously concede that they provide a useful service, but surely their contribution goes beyond that. Their work enables your “wealth creators” to remain heathy and alive so that they can continue doing what they are doing. Similar is the case for other groups in the public sector. Teachers/lecturers provide the basic skills without which tomorrow’s wealth creators would never be in a postition to make any contribution. Likewise people who work for the council maintaining the roads. They are paid out of taxpayer’s money, but the work they do maintains the infrastructure essential for wealth to be created.

    These people aren’t “paid a share of the wealth that Britain creates” in return for what they do. Without them the wealth wouldn’t be created in the first place.

  17. Lets imagine that Britain had no farmers or factory workers and no foreign income from tourism or financial services.

    Where does the money to pay the health and education workers come from them ?

    The answer is that it doesn’t because there is none.

    And this is where many people go wrong – providing useful, even essential, services is not the same as creating wealth.

  18. “…providing useful, even essential, services is not the same as creating wealth”.

    But creating wealth is dependent upon the existence of essential services. Otherwise those services wouldn’t be essential.

  19. Richards last point was very potent, one of my uni professors made a similar point in a more unorthodox way. He’d provide this hypothetical scenario…

    Imagine there had been a near apocalyptic event (a pandemic, small scale nuclear exchange etc) that didn’t wipe out civilisation but changed the world (and by extension its economy) as we know it back to a more (for lack of a bteer way of putting it) primitive state.

    In such a scenario which nations economies could adept best, other countries can fall back on a significant manufacturing base, a hyper efficient agricultural and food processing sector, significant natural resource wealth or if nothing else a service based economy that is strong in robust sectors like logistics. The UK has none of that, our economy is totally dominated by consumer spending and made up financial products. Very little we do actually creates wealth rather we just manipulate existing wealth.

  20. But those services don’t create wealth in of themselves.

    Think of public services, infrastructure etc as a football ground. In Britain we’ve focussed on the ground but neglected what happens on the pitch and its that which brings in the money. Meanwhile the other clubs might have worse grounds but they have teams playing more often and better.

  21. As I have posted previously, energy is a major component of this problem.

    North Sea oil ramping up in the 1980s allowed manufacturing exports to decline and imports for consumption to increase without seriously impacting the trade balance.

    North Sea oil output peaked circa 2000 and has now been in nearly 20 years of underlying decline. Plus domestic sources of energy have shrunk further with the almost total cessation of our coal industry. Net imports of energy have increased massively. But all governments since Blair have continued to deindustrialise and encourage rising consumption of imports regardless. The consequence is a humungous balance of payments deficit which can probably only be narrowed substantially by a collapse of consumption together with a major dash for fracking. Not a good situation at all.

  22. HH
    Energy is an important factor but even that’s a minefield of government failure. Only the other day it was revealed that large scale wind power is actually much cheaper than nuclear but that hasn’t stopped the government stonewalling further wind farms while at the same time pushing for the white elephant that is Hinkley Point.

    With further advances in wind power technology as well as out own unique geography which makes us literally the best country in the world for wind power and we have/had the potential to be a world leader in wind turbine production and actually become a surplus energy exporter. We’re a LONG way off that at present.

  23. Sorry all, having re-read my last post it was written horribly, kudos if you can decipher what I was trying to point out.

  24. “Only the other day it was revealed that large scale wind power is actually much cheaper than nuclear but that hasn’t stopped the government stonewalling further wind farms while at the same time pushing for the white elephant that is Hinkley Point.

    With further advances in wind power technology as well as out own unique geography which makes us literally the best country in the world for wind power and we have/had the potential to be a world leader in wind turbine production and actually become a surplus energy exporter. We’re a LONG way off that at present.”

    I’m a fan of wind but it needs a hell of a lot of back up capacity from other sources. What happens in a scorching hot summer when the wind doesn’t blow for a whole month? Whilst demand soars as everyone turns on the AC? No matter how advanced battery technology gets, no battery capacity could store a whole month’s energy demand. So significant back up will always be required. The coal plants are closing and some gas ones too, so the reliable back up capacity will largely have to be nuclear.

    What people are also forgetting is how fast electricity demand will grow when electric cars truly take off in the next 5-10 years. It will make electricity bills far higher than now and make driving much more expensive; it will become a major political issue especially for people who are already in financial dire straits.

  25. I’m no fan of wind power but prefer it to the madness which is Hinkley Point.

    I think solar might have more potential than wind but would also need a back-up system.

    HH is right about the increased demand for electricity from vehicles where this is to be supplied from seems to be of no concern to our political or business establishment.

  26. ‘ North Sea oil ramping up in the 1980s allowed manufacturing exports to decline and imports for consumption to increase without seriously impacting the trade balance.

    North Sea oil output peaked circa 2000 and has now been in nearly 20 years of underlying decline. … But all governments since Blair have continued to deindustrialise and encourage rising consumption of imports regardless. ‘

    Indeed.

    There seemed to be a casual assumption that North Sea Oil could be replaced by selling houses to one another or by low cost immigrants washing cars.

    This is I think one of the dangers of thinking that there are more wealth creating sectors than there actually are.

  27. Meanwhile in North-East Somerset…..

  28. HH
    Of course there will always need to be a back up to wind but that back up could easily be provided via other renewables. Solar is the most obvious choice especially for the scorching hot days, I doubt large scale solar farms like they have in the likes of Spain or Nevada are feasible here but a micro generation revolution is totally possible where we had every South facing building (with a few exceptions like listed buildings) installed with solar panels.

    The more medium/long terms solution though is tidal which Britain also has great potential in. I’m really eager for the Swansea Bay project to get going so we can examine tidal’s feasibility and develop the technology further. Britain has dozens of potential sites for large scale tidal bay facilities such as the Swale, the Mersey, the Highland Firths, the Humber, the Tay etc I’ve even heard of super ambitious plans to build tidal bay facilities across the Forth, the Bristol Channel and Morecambe Bay, if viable such facilities would generate enormous amounts of power. What I find particular exciting about this is that by the accident of geography these sites are distributed across the whole UK meaning every region would benefit.

  29. Solar won’t ever amount to more than peanuts in the UK because of our weak and inconsistent level of sunshine. Solar investment will have a much more profitable future in say Saudi Arabia, or the Australian bush.

    The only renewable reliable enough to provide back up to large-scale wind farms is hydro electric. We don’t have that much more potential on that on top of what is already operating in Scotland & Wales so we would probably have to import it from Norway then export wind power to them when we have a surplus. Importing hydro/geothermal from Iceland is also feasible if/when the interconnector to the UK is finally built.

  30. HH – true.

    Particularly odd that Rivers10 should claim, “are the shipyards coming back – No”

    Frank Field in fact hailed that Cammell Laird had done just that and is set to take on more workers. Are the car makers going to expand…”

    Again they just have at Jaguar Land Rover ! He’s almost right re the mills, although amusingly again one just re-opened in Greater Manchester, as China is now as expensive apparently.

  31. PT – ‘couldn’t Tristan have left out all the middle class snobbery.’ Glad he replied, “no.”

    Of course, he couldn’t – his (middle) name is Tristan!

  32. Richard – that’s a very good point you make re wealth creating v wealth consuming jobs.

    It’s hardly a surprise sadly as politicians tend to all be ex lawyers or cllrs and not wealth creaters.

    I heard a Parliamentary Committee note that not a single MP worked in the defence (manufacturing) sector. There’s overrepresentation of ex forces personnel of course, but not one who had worked in the sector that employs 800,000 people and still Britain’s 5th biggest employer by sector.

    It didn’t get a mention – as it wasn’t as interesting as defence – but more worryingly no MP had also worked in five of the other sectors in the top 10 including tourism (number 2) or horse racing (8th biggest industry). All wealth creation sectors and MPs just have no first hand knowledge of them.

  33. “Richard – that’s a very good point you make re wealth creating v wealth consuming jobs”.

    No it isn’t. It’s an utterly idiotic distinction, and one you won’t find used as a tool of analysis in any serious piece of research anywhere. Both groups are utterly dependent on each other. Attempting to distinguish between the two is like attempting to distinguish between a house and its doors and windows. I suppose you could argue that without the latter you would still have a house, but I don’t think you’d find many takers for living in it.

    Lancs mentions lawyers as examples of “wealth consumers”. How exactly could “wealth creation” proceed without a functioning legal system to mantain law and order and enforce contractual obligations?

  34. I rather suspect Kieran is a wealth consumer who prefers to think of himself as a wealth creator.

    And displays the sort of thinking which has got the country into its present mess.

    “I create wealth, you create wealth, we all create wealth.”

    Yet the UK’s last month of trade surplus was in January 1998, productivity and wage growth has been stagnant for a decade and the government has borrowed over a trillion quid.

    Britain is continually consuming more wealth than it creates.

    And it is doing this because Britain’s wealth creating sectors are too small.

  35. “I rather suspect Kieran is a wealth consumer who prefers to think of himself as a wealth creator”.

    It’s a matter of supreme indifference to me which of those two meaningless epithets you or anyone else would apply to my chosen profession. The fact that your response to my points about mutual interdependence includes such an ad hominem (“you would say that wouldn’t you, you’re just another of those bloody wealth consumers”) illustrates the shallowness of your argument.

    As I say, you will not find the wealth creator/wealth consumer distinction used as a tool of analysis in any serious piece of research, exhibiting as it does about the level of reasoning you might expect from someone propping up the bar in a Wetherspoons on a Monday afternoon (“lawyers, lecturers, bankers….what good do they do?”).

    As this short piece: https://www.economist.com/blogs/buttonwood/2011/08/wealth-creation-and-macroeconomics on this subject concludes “We are all of us economic parasites in a way, since we are dependent on the decisions and the well-being of others”.

  36. Lancs
    “Frank Field in fact hailed that Cammell Laird had done just that and is set to take on more workers. Are the car makers going to expand…Again they just have at Jaguar Land Rover”

    Small peanuts, these industries used to employ hundreds of thousands of people back in the day, as it is we’ll be lucky to maintain the current levels of tens of thousands, that’s what I was angling at, no need to be pedantic.

    “I heard a Parliamentary Committee note that not a single MP worked in the defence (manufacturing) sector…but more worryingly no MP had also worked in five of the other sectors in the top 10 including tourism”

    That’s either old data or plainly inaccurate, Just off the top of my head Labours new MP for Glasgow NE Paul Sweeney worked at BAE systems shipyards on the Clyde before becoming an MP and Labs new MP for Plymouth Sutton and Devonport Luke Pollard worked for the Association of British Travel Agents…so yeah defence manufacturing and tourism.

  37. Working for the Association of British Travel Agents is a lobbying job. I think Lancs Observer probably had in mind a proper job in tourism, something like a hotel manager or B&B owner. Though I’d be surprised if there were none of those left in the HoC. Several Tory MPs in the past were famous hoteliers, including Sir Charles Irving and Warren Hawksley.

  38. The person who wrote the above Guardian article would have been better off following the approach I posted on here earlier this year:

    “I can tolerate it [working in academia], firstly, because I never discuss day to day politics with work colleagues. A lot of people take that approach at work, but I think it’s particularly important if you work with “clever” people. The latter’s confidence in their intellectual ability tends to make them more fixed in their beliefs. They believe their opinions are based on facts rather than prejudice, when in reality they are just better at rationalising their prejudice than someone less intelligent or articulate. It’s a recipe for “dialogue of the deaf” debates on day to day politics that achieve nothing other than fostering resentment”.

    March 13th, 2017 at 9:56 am

    I understand the academic freedom argument, but it really isn’t worth the agro.

  39. “I think Lancs Observer probably had in mind a proper job in tourism…”.

    Unless its used in the context of the real ale of that name I dislike the use of the phrase “proper job”. I think it is better for politicians to have worked outside politics for a significant period, but I don’t care much about the exact nature of the job.

  40. I pretty much agree, I was merely saying to Rivers that working for the Association of British Travel Agents means you have worked in lobbying, not tourism. There is certainly no shortage of MPs who have worked in lobbying.

    Had a coffee with one of my customers this afternoon who has told me he’s moving to Switzerland….as well as the Brexodus factor I think the City is surprised the pound has remained so strong and there is expectation that either the currency will fall considerably further from here or the long upward march of interest rates is about to begin…personally I hope it’s the latter rather than the former but neither will be pretty.

  41. AW

    Could you delete the bits of my last comment you don’t want and publish the rest please.

  42. Rivers10 – it was March 2017 (so not old, but yes before the recent GE).

    HH is right re tourism.

    The only example I can think of – and that’s an MEP – is Jacqui Foster in the NW, who was an air stewardess.

    Richard is right (again).

    Kieran W – er, of course lawyers aren’t wealth creators. [In fact until recently they were restricted by regulation to work with any other professions or to do anything other than act for the client and obey the Courts’ directions] Indeed even one of their professional groups admitted they weren’t wealth creators in their recent submission to the Ministry of Justice opposing fixed costs in civil litigation – but then went on to point out their usefulness nonetheless.

    Lot’s of things are needed for things to function – job centres, driving tests, grave diggers, nurses – but they in no way create wealth! They merely administer life and death.

  43. In an attempt to avoid the wrath of AW I’ll try posting my earlier comment in parts:

    ‘ As I say, you will not find the wealth creator/wealth consumer distinction used as a tool of analysis in any serious piece of research, exhibiting as it does about the level of reasoning you might expect from someone propping up the bar in a Wetherspoons on a Monday afternoon (“lawyers, lecturers, bankers….what good do they do?”). ‘

    Would their thoughts be more valid if they paid twice as much to drink at a craft beer bar ?

    And why the particular hatred for Weatherspoons ? It provides a wide variety of good, low cost food and drink. I’ve never had a bad experience in any Weatherspoons I’ve visited nor do the customers look any different to those in other pubs.

    It does seem fashionable in some circles to decry Weatherspoons and its customers – personally I think that says more about those who do so.

  44. I’ve mentioned previously that the last month of trade surplus the UK had was in January 1998 so I’ll compare how the economy has changed from 1998 to 2016:

    Industrial production -8%

    Retail spending +58%

    A big shift towards consumption and what effect has this had on the nation’s finances ?

    Well government debt as a percentage of GDP has increased from 36% (and falling) in 1998 to 86% (and rising) in 2016.

    Meanwhile Britain’s current account deficit has increased from £4bn in 1998 to almost £100bn in 2016:

    We need to face reality regarding the difference between wealth creation and wealth consumption.

    Because it exists and so does the near trillion and a half quid governments have borrowed since that last trade surplus of January 1998 does.

    Our taxes will be paying it back for the rest of our lives.

  45. On this issue the very knowledgeable Robert Smithson posted this comment at PB:

    ‘ We have chosen Brexit with the most unbalanced economy in the developed world. Just 20 years ago when Kenneth Clarke handed over the Chancellor role to Gordon Brown, Britain had way more foreign assets than liabilities. Now it’s the other way around.

    We’ve funded our spending spree by selling our assets and borrowing from the rest of the world. Consumer spending as a percentage of GDP is the highest in the developed world, we run a triple deficit, and the savings rate is the lowest in recorded history.

    There will be a rebalancing of the British economy, and it will be painful.

    And it will be nothing to do with Brexit.

    But I think we all know what will get the blame. ‘

  46. There’s nowt wrong with a ‘spoons. None of the many pints of real ale I’ve consumed in them over the years has been any less than good. If I am away and the place I am staying doesn’t have breakfast included more often than not I’ll go to a Wetherspoons. But they’re not exactly research symposiums are they?

    Much of what you say about macro-economics makes sense. It’s when you venture down the cul-de-sac of making this hard and fast distinction labelling individuals and sectors of the economy as ones that “create” or “consume” wealth that you become unstuck. No individual or sector creates wealth out of nothing. Conversely none merely consumes wealth while creating nothing.

  47. “There will be a rebalancing of the British economy, and it will be painful.

    And it will be nothing to do with Brexit.

    But I think we all know what will get the blame.”

    I don’t see why the rebalancing of the British economy couldn’t have been done without Brexit. Numerous EU economies have painfully rebalanced over the past decade. It has been a political choice over several decades to let manufacturing wither and focus all our energies on financial services, aided and abetted since the late 1990s with the refusal of governments to see an overvalued currency as a bad thing. Whatever downsides there would have been to joining the Euro, if we could have locked in at a competitive GBP rate in the late 90s it would have helped manufacturers and perhaps sapped the housing and consumer boom somewhat.

    These problems go back way before 1998, perhaps as far back as the 1970s oil shock. North Sea oil was a sticking plaster which postponed the disastrous scale of the structural current account deficit from emerging until the early 2000s.

  48. ‘ It has been a political choice over several decades to let manufacturing wither and focus all our energies on financial services, aided and abetted since the late 1990s with the refusal of governments to see an overvalued currency as a bad thing. ‘

    We’re back to the wealth creators and wealth consumers debate.

    Who gains from an overvalued currency ? Anyone who wants to buy imported goods and take foreign holidays. Who loses out ? A lot fewer people.

    As to the focus of financial services I’ll point out that financial services in Britain and the British political establishment are centred within three miles of each other.

    Its an interesting hypothetical but what if the British centre of government and the British centre of finance were in separate cities – as they are in the USA, Canada, Australia, New Zealand and South Africa.

  49. Yes, though our extreme London-centricity is really only a product of the past 40 years.

    Hard to believe now, but even as late as the 1970s, major industrial cities like Sheffield and Birmingham were wealthier than London, relative to their size.

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