It's welcome that the UK economy is now bigger than its pre-crisis peak in early 2008. London house prices are 30 per cent higher than they were then, while rises in housing rents have been as spectacular. Rock bottom interest rates helped home owners and businesses but penalised savers, especially pensioners. Bonuses have long returned to the City but public sector workers are unlikely to see wage rises soon.
The winners are not just in the City. London's creative economy is also buzzing. But others have lost out: those on welfare have been squeezed; London parents have confronted rising childcare costs, 25 per cent above the UK average; and the rate of joblessness for 18-24 year olds in London is 2.64 times as high as the whole workforce, which is the highest multiple in Great Britain.
The recession did not hit property owners, creative workers and bankers as hard as some, while others will feel that talk of recovery remains premature. In many ways, London is a latter-day Babel, spewing out spectacular success, wealth and opportunity, but the period since 2008 has reinforced the need for these to be spread more widely among Londoners."
Jonathan Todd, Chief Economist at think-tank Demos
While almost everyone will be delighted about economic growth of more than three per cent, we hear frequent comment from across the spectrum that much of the growth is of the “wrong” type (consumption-led and dominated by services). We also face something new: real wage stagnation. Are these connected?
Three factors dominate real wage stagnation: replacement of manufacturing jobs with lower-paid service jobs, erosion of demand for middle-skill white-collar jobs, and — a temporary trend — replacement of public sector jobs, where productivity is measured by cost, with private sector jobs, where productivity is measured by sale value of their product. Often the product is the same but it looks to statisticians like a reduction in output, and represents a reduction in wages.
The UK economy will almost certainly continue to be increasingly dominated by services of two sorts — largely low-end employment: healthcare, bars, hotels, domestic help; and high-end employment: international banking and financial services, legal, media, digital. Any other vision of the future does not fit with our current skills and cost mix. The hourglass economy is our future, whatever else politicians may wish for.
Neil Record, chairman, Record plc
In North Finchley we’ve seen more businesses close than open in the past year. The only outlets opening at the moment are coffee shops, bookies’ and charity shops.
Costs have escalated in the flooring sector in unprecedented ways, partly because of rising energy and raw materials costs. Accessing funding as a small business is very difficult — if anything the banks have become more draconian. The internet is having an huge and unavoidable impact.
Rather than a recovery, I think we’re moving into uncharted territory of diminishing returns for most of us. Small business is at an added disadvantage to multinationals which get away with paying far from their due in corporation tax. I feel frustration and bitterness at the politicians responsible for this state of affairs — and little hope of any alternative.
Julian Hurst, Julian Hurst Interiors
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Real incomes have seen an unprecedented fall since 2008 and the majority of employees find themselves in increasingly insecure work, as evidenced by the ballooning numbers stuck in zero hour contracts.
Household debt has risen to 135 per cent of household earning, up from 110 per cent in 2011. The economy is growing off the back of low-paid insecure work and debt-fuelled consumption, just as it did in the years leading up to the crash. Is this really something to cheer about?
Our economy simply isn’t working for the majority, and this will not change until we rethink how we measure progress. We need a renewed focus on delivering good, sustainable jobs, rather than simply obsessing over headline employment figures. Those using the GDP measure of economic progress seek only to pull the wool over our eyes - the economy is on unstable footing.
Faiza Shaheen, new economics foundation
I was amazed to discover a City editor highlighting the problem of inequality so lucidly. Will Anthony Hilton’s next article propose some solutions? By the way, would he agree that the apparent “success” of Government policy (belated “high” growth) is due to its abysmal failure to reduce the national deficit and debt, ie, to the failure of its so-called austerity policies
Professor Alan Sked, LSE
The fiasco of Secret Cinema
When Secret Cinema is making £4 million from ticket sales and fans have spent huge amounts on costumes, transport etc, the bottom line should be a full refund for ticket holders for cancelled Back to the Future performances plus the opportunity to book for another day and some form of compensation. And it’s staggering to see Secret Cinema management posting links to media interviews assuring people that at least the set looks fantastic. Founder Fabien Riggall should have grown a pair and gone to issue apologies in person.
Audiences have grown faster than Secret Cinema’s skills base, so that it still relies on a massive volunteer workforce when fulfilling the vision for Back to the Future called for something like a professional film production company. Or to look at it another way, the kind of bespoke experience and intimate relationship with audiences with which Secret Cinema is associated can only work up to a certain scale before it starts to look greedy. The live performance and screening of the Coen brothers’ Miller’s Crossing I went to early this year – not a well-known choice of film, audience members still having to pay for costly drinks despite receiving novelty money at the start – already felt to me like the concept over-extending itself. The handling of these cancellations is destroying the brand; Secret Cinema needs to think about reinvention if it’s to have a future.
Miss Cakehead PR, misscakehead.com
Keep the airport out of North Kent
Andrew Lloyd Webber wants to move Heathrow to the North Kent marshes on the Hoo Peninsula because they’re not pretty enough to be worth saving. If he had walked further when he went to visit he would have found pear and apple orchards, strawberry and raspberry fields, and two huge RSPB reserves, one high on a hill with fine views, giving the lie to his belief that the area is merely flat.
We each have our own idea of rural beauty. I love the Chilterns, the North and South Downs, but give me the North Kent marshes any day. Heaven help us if the countryside’s fate rests on a chocolate-box aesthetic.
Professor Danny Nicol, SE18
Lord Lloyd-Webber might convince those who live some distance from Heathrow. But thousands of people in Hounslow, Hillingdon and Slough whose livelihood relies on the airport fear the economic collapse of the area.
As for noise: I have lived in Hounslow all my life and while the planes fly lower than in Victoria where Lloyd Webber resides, they aren’t that interfering. If you choose to live under the flight path, deal with it. The rest of us who grew up here don’t really mind.
Joseph Dorking
Israel is not acting for all the Jews
When my organisation first took its banner on a pro-Palestinian demonstration during the 1982 Lebanon War, we were the only Jewish group protesting. On Saturday, we were part of a “Jewish bloc” of five organisations showing our collective anger. We were challenging the lie that Israel acts in the name of the Jewish people. Nor does it act on behalf of all Israelis, as Saturday’s Tel Aviv protest showed. We were also protesting at the UK government, which continues to sell arms to Israel and makes only the most muted criticisms of its actions.
Above all, we marched to show solidarity and our support for peace with justice, which can only be achieved through a political solution.
D Rosenberg, Jewish Socialists’ Group
The Gaza protests bring a distorting obsession with Israel. Amnesty issued a report on how Syria has deliberately starved inhabitants of the Palestinian Yarmouk refugee camp. Hundreds have died. Where is the outrage?
Jeff Masterson, Bromley
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