Luke Thomas takes aim again at the Tory Twitter fish ...
In the second of my series of posts taking aim at Tory Party tweets, I’m going to briefly discuss the UK’s trade figures, released by the ONS this morning. The Conservative Party press office took to Twitter in its usual Orwellian way, and described the figures like this:
UK Trade Deficit cut significantly to £1.4bn (down from £2.2bn) Excluding Oil: Exports up £200m Imports down £400m http://t.co/cDCvNYXN6Z
— CCHQ Press Office (@CCHQPress) January 9, 2015
They should perhaps avoid linking to the real report, since the devil is always in the detail, and in this case the devil is Beelzebub himself.
The trade balance is the difference between the goods and services we export worldwide, and those that we import from the rest of the world. A deficit means that we have imported more than we have exported, while a surplus means we have exported more.
Taking a look at the report from the ONS, it’s certainly true that the trade deficit has shrunk by £0.8bn since October, but this still leaves a trade deficit of £1.4bn. The real problem with the Tory’s triumphalism is detailed by the ONS in the very next bullet point of the report:
So our shrinking trade deficit is not the good news that the Tories would want us to believe it is, but represents a wholesale shrinking of trade overall.
What’s even worse for Osborne’s so-called ‘march of the makers’ is that the composition of our trade has shifted even further towards services, and away from goods.
This gap between service exports and goods exports is simply a symptom of a long-term trend in the UK of our shrinking manufacturing base, while letting our service sector balloon – particular the financial services of the City of London. This ‘financialisation’ of our economy has given the UK a particular weakness when it comes to the boom and bust cycles that have hobbled capitalist economies since the 70s. We simply have little else, economically speaking, to fall back on when the financial sector suffers a crash.
Whatever the Tories may claim about the rebalancing of our economy away from services to manufacturing, they have done nothing to halt or reverse the financialisation of our economy introduced by Thatcher, stewarded by Major, and embraced wholesale by Blair and Brown.
- See also Shooting Tory Fish in the Twitter Barrel – part 1: on economic rebalancing