Taking the pulse around the UK economy - are the anti-virals working?

Here is a whole feast of reports about the current state of the UK economy from the BBC – albeit some of them quite unpalatable. On the day on which the Labour Force Survey shows the biggest quarterly rise in unemployment since records of the ILO measure began in 1971, the BBC has a survey that shows that two out of three people know someone who has lost their job due to the recession, and 40% fear losing their own job. The survey is part of their feature ‘Taking the Pulse around the UK’ which is being covered on TV, radio and the website today. As well as the survey there is a series of video reports; in one from a Northampton market where a fruit and vegetable trader says he has never worked so hard for so little, while a clothes stall owner says she has altered the clothing she sells, stocking cheaper goods than before, in order to survive. In another, Hugh Pym summarises key indicators about the state of the economy, and a third has Stephanie Flanders debating the state of the economy with herself. The set of reports are well worth browsing through, and following the links to related items.

Jaguar have announced a loss of another 300 jobs today and early closure of production of their X-type model, as they struggle to adjust their capacity to meet the lack of demand for cars, particularly for premium models. The BBC survey shows the extent of the change in shopping habits, with 75% consciously trying to spend less, and 51% less now likely to use credit cards than before. 50% of people questioned also said they expect the government to continue with using borrowing to balance its books – although Peter Mandelson, the business secretary, told reporters yesterday that “Britain is facing a decade of public spending “constraints” in order to “rebalance” the country’s finances”. He suggested that cuts in spending would be made by finding greater efficiencies, but that the government would continue to invest in “schools, police, hospitals, international aid and frontline services including our country’s defences”. The article about this is also well worth reading to consider the difference between government long term investment and short term spending on maintaining benefits and on running the machinery of government.

Today’s other big headlines are about the government’s plans to cut carbon emissions in the UK. They have set targets for 2020 to cut emissions by 34% compared to 1994 – of which 22% has already been achieved. They will also try to move the economy towards EU targets for 2020 of a 15% share of energy to come from renewables - which could include 7,000 new wind turbines - and a 20% increase in energy efficiency. Beyond that, the government has set an ambitious goal of slashing emissions by 80% by 2050. But this should help to create jobs in recycling and related technologies – the ‘green sector’ – with Gordon Brown predicting up to 1.2 million people will be employed there within a decade. The measures expected in this Low Carbon Industrial Strategy white paper are:
• Smart meters in every home
• Easier, more flexible loan schemes for home insulation
• Better financial incentives for home electricity generation
• Measures to facilitate up to 7,000 new wind turbines
• Incentives for cycling and electric vehicles

Many environmental campaigners believe that this is a chance for Britain to lead the world in implementation of integrated measures which could be managed to help deliver a real improvement in the level of carbon emissions. Andy Atkins, executive director of Friends of the Earth UK, has said “Seizing the green initiative will create exciting new jobs and business opportunities through ambitious measures to cut energy waste and develop the UK’s vast green energy potential.”

But where will the money for the investment in these measures come from? Which is the most urgent side of the argument – that we can’t afford to invest in the green sector when we are already likely to take 27 years to pay off our public debt, or that, if the planet is to survive, we can’t afford not to?